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Budget Impact: Equity indices crash after government re-introduces LTCG tax

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Sensex

Mumbai, Feb 2: Indian equity markets tumbled on Friday following negative global cues and a disappointing announcement in the Budget on the reintroduction of the long-term capital gains (LTCG) tax and fiscal slippages. 

Market observers stated disappointing announcements in the Budget 2018 such as the LTCG tax and a higher-than-expected fiscal deficit target for 2018-19 dampened investors’ risk-taking appetite.

On a closing basis, the barometer 30-scrip Sensitive Index (Sensex) plunged by 839.91 points or 2.34 percent to 35,066.75 points.

While, the National Stock Exchange, the wider Nifty50 climbed down by 275.40 points or 2.50 percent to close at 10,741.50 points.

“Markets corrected sharply on Friday as selling intensified during the day. Investors seemed to be disappointed with the fiscal deficit numbers and the introduction of LTCG tax,” Deepak Jasani, Head, Retail Research, HDFC Securities, told news agency IANS.

“Negative global cues also spoiled sentiments. Major Asian markets have closed on a mixed note. European indices like FTSE 100, DAX and CAC 40 were trading in the red,” Jasani further added.

In the broader markets, the S&P BSE mid-cap index fell by 4.03 percent and the small-cap index by 4.65 percent.

“Markets tumbled as the LTCG tax on equities investments dampened sentiment, while bonds slid for a second consecutive session on worries that the central bank would become more hawkish on inflation,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

“Investors worried that higher spending and the government’s move to raise minimum support prices for crops could lead to higher retail prices at a time when consumer price inflation has already hit a 17-month high of 5.21 percent, well above the Reserve Bank of India’s target of 4 percent,” he added.

In the meantime, Indian currency, the rupee weakened by four paise to close at 64.06 against the US dollar from its previous close at 64.02.

“The Indian markets opened on a weak note and continued to fall led by selling in financials, mid-caps and small-caps,” said Sandeep Chordia, Executive Vice-President – Strategy at Kotak Securities.

“In our opinion, global market volatility led by rising bond yields, profit booking (markets had notched one of the best monthly gains before budget) and concerns on deteriorating macroeconomic condition were the probable reasons for the market fall,” he asserted.

Big Sensex gainers on Friday were: Tata Consultancy Services, up 0.33 percent at Rs 3,149.15; Hindustan Unilever, up 0.10 percent at Rs 1,372.70; and Wipro, up 0.05 percent at Rs 301.40.

Big Sensex losers were: Bajaj Auto, down 4.90 percent at Rs 3,242.60; Bharti Airtel, down 4.62 percent at Rs 417.80; Axis Bank, down 4.28 percent at Rs 564.95; Maruti Suzuki, down 4.28 percent at Rs 9,000.30; and Reliance Industries, down 4.07 percent at Rs 905.70.

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Business

Mi India’s Republic Day Sale: List of TVs, Smart Bands, and Smartphones available at Huge discounts

Flipkart VIP, Amazon Prime, and Mi VIP Club members will be able to take advantage of this sale from January 19, a day before.

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Amazon Flipkart

Mi India has announced the Republic Day offer. The sale offers huge discount offers on a variety of products including smartphones, smart TVs, and Smart Bands.

Mi India’s Republic Days offer sale will start from 12 noon on January 20, 2021, which will continue till 11.59 PM on the night of January 24, 2021.

This offer can be enjoyed on the e-commerce sites Amazon, Flipkart, and Mi.com. Flipkart VIP, Amazon Prime, and Mi VIP Club members will be able to take advantage of this sale from January 19, a day before.

Mi Smart Band 4

Selling Price – 2,299

Sale price – 1,899

Mi TV Stick

Selling Price – 2,799

Sale price -2,299

Mi Box 4K

Selling Price – 3,499

Sale price – 3,299

Mi LED TV 4A PRO 108 cm (43)

Selling Price – 24,999

Sale Price – 23,999

Mi LED TV 4X 50

Selling Price – 34,999

Sale Price – 33,999

Mi Watch Revolve Midnight Black & Silver

Selling Price – 10,999

Sale price – 8,999

Earphones (TWS) – Mi True Wireless Earphones 2C

Selling Price – 2,499

Sale Price – 1,999

Earphones (TWS) – Mi True Wireless Earphones 2

Selling Price – 3,999

Sale price – 2,499

Mi Beard Trimmer 1C

Selling Price – 999

Sale Price – 799

Mi Smart Water Purifier (RO+UV)

Selling Price – 12,999

Sale price – 9,999

Redmi Earbuds S

Selling Price – 1,799

Sale price – 1,499

Redmi Smart Band

Selling Price – 1,599

Sale price – 1,299

Redmi 9i (4+ 64GB)

Selling Price – 8,299

Sale price – 7,999

Redmi 9 Prime (4+64GB)

Selling Price – 9,999

Sale price – 9,499

Redmi Note 9 (6+128GB)

Selling Price – 14,999

Sale price – 13,999

Redmi Note 9 Pro (4+128GB)

Selling Price – 15,999

Sale price – 13,999

Redmi Note 9 Pro Max (6+64GB)

Selling Price – 16,999

Sale Price – 14,999

Mi LED TV 4A PRO 80 cm (32)

Selling Price – 14,999

Sale Price – 14,499

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Dogfight: Airlines unleash deep discounts to dominate the sky

IndiGo’s Chief Strategy and Revenue Officer Sanjay Kumar said: “Low fares always helps stimulate the demand for the travel period far out and works as a part of airline strategy.”

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Preparing for Landing

New Delhi, Jan 19 : Fare wars induced deep discounting has reappeared in India’s aviation sector, as airlines seek to augment cash reserves, consolidate market share and bring back more capacity.

The first shot in this war of extremely low prices was fired recently with most airlines commencing their sales offers.

The development comes around a year since Covid-19 lockdown devastated the sector.

Industry insiders, however, now believe that the roll-out of anti-Covid-19 vaccination programme will give a boost to air travel.

Besides, some of the travel period offered under these schemes are beyond the current expiry of the fare cap imposed by the Centre.

IndiGo’s Chief Strategy and Revenue Officer Sanjay Kumar said: “Low fares always helps stimulate the demand for the travel period far out and works as a part of airline strategy.”

“These sales stimulate traffic among extremely price sensitive customers and helps airlines meet overall objectives.”

The latest passenger traffic data from the sector regulator DGCA indicate that the growth in passenger volumes is not yet adequate enough for a revival in the airline sector.

The aggregate passenger traffic in December 2020 at 73.27 lakh was still 43.7 per cent lower on a year-on-year basis.

“Lack of adequate demand in the post festive season along with higher available capacity has therefore, led a drop in passenger load factor for some of the airlines in December 2020 on a sequential basis vis-a-vis Nov 2020,” said Suman Chowdhury, Chief Analytical Officer at Acuite Ratings & Research.

“Such a scenario is possibly leading to a deep discounting strategy from airline companies. This involves sale of seats over the next few months through an attractive discount or add ons to ensure higher PLF over the next 1-2 quarters.”

Nevertheless, deep discounts are expected to hurt the already fragile financial condition of the sector.

“It will have an impact on the profitability of airline operations which has already been under losses in the last few quarters. In our opinion, however, passenger demand will witness a significant improvement in the next few months with the tapering of the Covid infection rate as well as the progress on the vaccination,” Chowdhury said.

Apart from ensuring a minimum PLF in the coming months, experts contend that deep discounts will trigger liquidity enhancement for airlines.

“Low airfares this month indicate the expected dip in travel post holiday season in December. Airfares in Jan across key routes have decreased 15-20 per cent MoM,” said Rajnish Kumar, Co-founder & CTO, ixigo.

“Heavy discounts being rolled out by major domestic and international airlines will definitely woo travellers who are planning vacations this year. With government caps ending on March 31, the discounts will attract flyers to plan their trips in advance and accelerate recovery in bookings to pre-Covid levels this year.”

On the other hand, the government has till now permitted the industry players to operate at 80 per cent of their pre-Covid capacity.

The operational capacity deployment level is expected to reach pre-Covid mark by the end of calendar year’s first quarter.

“In the current scenario of impact on demand due to the pandemic, while some aircraft continue to be grounded, the passenger load factors (PLFs) of airlines have also been impacted despite the lower capacity,” said Kinjal Shah, Vice President, ICRA.

“Thus, airlines have to take a calculated call on fares and its impact on demand.”

(Rohit Vaid can be contacted at [email protected])

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Azim Premji and Dr Devi Shetty chosen for PCB awards

Besides them 25 senior journalists have been selected for the ‘Press Club Annual Awards’, a release said.

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Azim Premji Wipro

Bengaluru, Jan 19: The chairman of Wipro Limited Azim Premji and the founder chairman of Narayana Health Dr Devi Prasad Shetty are among those who have been selected for the annual awards given by the Press Club of Bangalore.

Premji has been chosen for ‘Press Club Person of the Year’, while Dr Shetty and actor-Director Sudeep Sanjeev have been selected for the ‘Press Club Special Award.’

Besides them 25 senior journalists have been selected for the ‘Press Club Annual Awards’, a release said.

Chief Minister B S Yediyurappa will facilitate the awardees at a function scheduled for the third week of February, it said.

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